Grover Norquist to Newsmax: States Would Abuse Internet Tax Law

A proposed law to force internet retailers to collect sales tax would trigger states to abuse buyers with unfair tariffs, according to Grover Norquist, founder of Americans for Tax Reform.

“When a state is crazy and has sales taxes that go too high, people will travel to a different state and buy something, they’ll buy online or through catalogs,’’ Norquist told Newsmax TV’s “The Steve Malzberg Show.’’

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“That competition keeps states from being too abusive to citizens in their state. This law, if it were to pass … would allow Alabama politicians to reach into New York and tax New York businesses.

“Do you think there’s any end to the abuse that politicians in one state will subject businesses in another state who by definition can’t vote against them?’’

The Senate voted this week 74-20 to debate legislation known as “The Marketplace Fairness Act’’ that would help states force online stores to collect sales taxes.

If passed, retailers on the Web would have to collect an estimated $22 billion in taxes that is now ignored.

Opponents say such a law would be a bureaucratic nightmare for sellers, while those in favor say it would even the playing field for brick-and-mortar retailers who must collect taxes.

Norquist, whose group lobbies against all tax increases, said that crossing state lines for income tax purposes, business taxes, and sales taxes, is a “terrible, terrible precedent to enter into and this is exactly why we need to avoid and say no to.

“I hope we can stop this in the House. We need to dramatically amend it in the House if we can’t stop it, but the best thing to do is stop it and rethink.’’